Pillar 1A: Monetary Policy

E-RUPI

Issues with Current procuremement/DBT

Significance

 Freedom to beneficiary to purchase goods as per its own preference

 Power and dignity to customer unlike PDS
  Check on corruption and sub-standard quality
 Check on diversion of funds via DBT
 Less touchpoints need not to stay in queue faster and convenient service delivery
 Increased role of pvt sector
 Extension to welfare schemes + pvt sector

Conclusion: long run accountability, transparency and efficacy

Measures to promote less-cash economy

 Various committees formed: Chandrababu Naidu chief miniters’s committee

 Ceiling on cash transactions
 Tax incentives for companies using digital payments
  TDS on withdrawl >1cr from a single user account
 Digidhan Mission and Digital Payment Mission  MeitY campaign
 MDR subsidy by MeitY on UPI and RUPAY
 Payment Banks
 UPI offline pilot

Suggestions by Nilekani Panel

 Digital Financial Inclusion Index by RBI  current score 54%

 Fund for development of digital payment infra in poorly served areas  Payment Infra Dev Fund
established
 NEFT/RTGS available 24/7 at no cost (done)
 Local language in apps/softwares

Central Bank Digital Currency

Budget-2022 announced issuance of Digital Rupee using blockchain technology

Benefits
NFTs
MONETARY POLICY
[Definition] Monetary Policy is a macroeconomic policy, designed by Central bank of a country, to manage
money supply & interest rates. It helps shaping variables such as inflation, consumption, savings,
investment, & capital formation

Significance

Human dev Economic Growth

Limitations: Non transmission of Monetary Policy: Unable to control inflation + failed to boost GDP growth
Pillar 1B: Banking Issues
Golden Anniversary of Nationalisation of Banks
First round of bank nationalisation was done in 1969 so, 2019-1969=50 years Golden anniversary
of the bank nationalisation

Only one bank is among global top 100. India need atleast 6 among top 100 wrt size of economy
PSB’s Issues

What to be done?
Merger and Privatisation of PSBs

ALLOWING NBFC/LARGE CORPORATE TO SETUP BANKS

Mohanty committee recommended allowing large NBFCs/Corporate/Industrial Houses to apply
for Bank licenses
Cooperatives
an autonomous association of persons united voluntarily to meet their common economic, social,
and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise
Constitutional Provisions:

1. Article 19: right to form cooperatives

2. Article 43B: DPSP regarding promotion of cooperatives
3. A state subject under schedule 7

Note: Dev and Economics are generic points while rural and urban are specific ones
Relevance:

1. Governance and Development

o Target economic aspects of social inequalities  [inclusive growth]
o Necessary for holistic decentralisation of power
o Women empowerment with greater role in resource mgmt and decision making (SHGs)
o Reducing rural-urban divide
o Check class conflicts
2. Economic:
o Fragmentation of assets--> agriculture and village industries turning uneconomic
o Lack of cheap credit --> exploitation by money lenders
o Link to formal banking sector
o Technical and Managerial support
o Marketing and sales (Creating a brand)
o Higher bargaining power (consolidation of supply and demand in case of credits)
3. Role in Rural Areas:
o Educating farmers about best practices (Balanced use of fertilisers, water, etc.)
o Allied activities expansion
o Quality standards and checks
o Food Processing Industry
o Skilling rural youth
4. Role in Urban areas:
o Organising small artisans and businessmen
o Tackling social and economic empowerment of urban poor
o Access to resources other than credit in remote areas
o Higher bargaining power (consolidation of supply)

Examples:

 “Nivaz”  , under a cooperative society based in Guwahati, is running the business of packaging of
mustard oil, grinding of spices, tea warehousing etc catering the needs of people at large
 Amul  is managed by the Gujarat Co-operative Milk Marketing Federation Ltd, and is jointly owned
by around 36 million milk producers of Gujarat

Challenges

 Mismanagement and Manipulation: The people on the board are not held accountable (need
transparency)
 Cooperative Banks in Rural sector: The current model created about 50 years ago--> need of
overhaul
 Skewed to few states only. not in tune with the current socioeconomic situation
 Lack of Access to Capital: depend only on the shareholders.
 Lack of awareness with objectives of the Cooperative Movement
 inadequacy of trained personnel.
  Lack of cooperative movement in urban areas

Ministry of Cooperation
Why?

 separate administrative legal and policy framework

 deepen Co-operatives as a true people based movement reaching upto the grassroots
 streamline processes for ‘Ease of doing business’ for co-operatives
 enable development of Multi-State Co-operatives (MSCS),
 More financial and legal power needed for penetration to other state (check skewing)

Insolvency Issues : Budget 2022

Cross Border Insolvency
Cross-border insolvency has two facets:

[1) foreign creditors should be able to recover money lent to Indian corporates & VICE VERSA.

[2) During Indian company's insolvency in India, the Indian lenders should be able to recover
money from Indian company's foreign assets easily, AND VICE VERSA’

VOLUNTARY LIQUIDATION OF COMPANIES

Voluntary Liquidation: when the owner has not committed any loan default but wants to
shut down the business.

Voluntary liquidation can be done through

A) sending application to the registrar of companies under Companies Act, 2013

B) sending application under the insolvency bankruptcy code.

However Method-A is more popular than B at present.

IBC Analysis
Regulatory Forbearance (ES21)

Lessons learnt

 policymakers should not continue such emergency measures/ forbearance after the crisis is over
 banks should be ordered to conduct Asset Quality Review (AQR) and take corrective measures
 penalised if not reporting the malpractices
 National Company Law Tribunal (NCLT) should be empowered
Use of tech for NPA issues

Bad Bank (NARCL, IDRCL)

Shadow Banking

Significance
 1. They can facilitate credit availability to certain sectors that might otherwise have difficulty
2. play both a substitute and complementary role for commercial banks  able to map the
financing needs of the borrowers with the financing provisions
3. formal banking systems are confronted with regulatory constraints.
4. lead role in providing innovative financial services to MSMEs
5. development of an economy by providing a fillip to transportation, employment generation,
wealth creation, bank credit in rural segments
6. support financially weaker sections of the society.

Challenges

1. Liquidity risk: asset liability mismatch

2. Regulatory arbitrage: a banking activity. Regulations applied to banks in this regard can
be circumvented
3. A 2017 report by the RBI said that 99.7% of shadow banking in India involves making long-
term loans against short- term funding  risk of defaulting
4. NBFCs become too big, invest in assets of dubious quality and are interconnected with
other financial institutions, as demonstrated in the case of IL&FS.
5. Concentration risks— too much exposure to some sectors. Real estate sector very risky

Measures by Govt

Regulation

1. Powers to RBI to regulate NBFCs increased

2. National Financial Reporting Authority under companies act 2013 over CAs
3. Asset-Liability Mgmt norms + certain BASEL III norms by RBI
4. Utkarsh 2022 roadmap
5. Norms for Credit rating agencies by SEBI
6. Health Score for NBFCs

Helping

1. Partial credit Guarantee Scheme PSB to invest in debt securities of NBFCs

2. Sp. Liquidity Scheme company to buy debt securities of NBFCs
Twin Balance Sheet Problem

Steps Taken

 IBC
 PCA Framework
 Project Shashakt
 PSB Recapitalisation
 Bad bank
 Fugitive Economic offenders act 2018
 Governance Reforms of PSBs and Corporate

Pillar 1C : Sharemarket
Bond Yield and terms
IPO Bubble Burst
ES22- 2021: more than 70 IPOs issued worth nearly ₹90,000 crores - this is higher than in any year in last
decade. More than 2 crore retail investors have open demat account in 2021

But PayTM listing  decline of almost 25% while listing

Why?

1. General slowdown due to fed tapering

2. Higher valuation of PayTM IPO Institutional investors not confident of growth
prospects with UPI, Rupay, etc.
3. Startup bubble: valuation game
4. Ethical aspect: greed driven investors

Financial Market
Financial Market is the place where buying and selling of securities takes place. Doesn’t require physical
location. Can be done online / telephone as well. Two types: Money market and Capital Market

Significance

1. Mobilisation of resources and utilisation in an efficient manner

2. Financial markets create liquidity and allow businesses to grow
3. help them raise money for their ventures
4. reduce the risk by having information publicly available to traders and investors
5. help to calm the economy by instilling confidence amongst the investors
6. Reduced cost of transaction

India: why not fully developed? Most have a financial depth over 2.5 times that of India’s, with
sophisticated markets and better fundraising for productive investments.

1. Poor financial and digital literacy

2. Seen an gambling  speculative trading
3. Poor access to retail investors can’t invest in G-sec
4. Unethical practices by agents, etc.
5. Investor protection and awareness still weak
6. Parallel economy (black money)

Steps taken by Govt to deepen financial markets

I. Promote participation
a. Retail Direct Scheme
b. Paperless opening of DEMAT account
c. Preference to policy holders in LIC IPO
d. Social Stock Exchange
e. Reduced STT
II. Confidence Building
a. SCORES portal by SEBI
b. Programs for investor education  Investor Charter by SEBI
c. Risk rating for Mutual funds
Investor Charter
Pillar 1D
FDI in Insurance sector
insurance policy is a Debt instrument / Legal contract against eventualities of death or damage.

Challenges
Financial Inclusion and Social Security

Credit: Refinancing of Micro loans, Credit guarantee by govt, MUDRA loans, Stand up India scheme, PSL
norms, SHGs, PM-Svanidhi, Kisan Credit Card, Farm loan waivers

Banking services: PM-jan dhan yojana, IPPB, RRBs, Banking correspondent agents, 25% branches in rural
areas

Investments: Sukanya samridhi yojana, Kisan Vikas Patras and other PO schemes, PPF, tax rebates

Pension/Insurance: Micro insurance at very low premiums (Jeevan Jyoti bema), Insurance for Gig workers
under social security code, NPS, fasal bima yojana, ayushman bharat

Consumer Protection: Ombudsman, SCORES portal, etc.

Women and financial inclusion

Intro: 83% male vs 77% women have bank accounts Disproportionate impact of poverty, lack of access of
resources and services

Significance

1. Building financial resilience key decision maker in household

2. Empirical evidence of better outcome with empowering women
3. Increasing social capital  SHGs
4. Reducing gender gap in financial domain  economic  social impact
5. Correlated with better education and health outcomes
6. Increasing female workforce participation rate

Challenges

1. Demand side
a. Concentration in low income jobs
 b. Lack of colletral
c. Lack of bargaining powers
d. Lack of confidence
2. Supply side issues
a. Reduced Mobility due to social norms
b. Lack of gender specifc products
c. Lack of distribution channels
d. Poor digital education and capacity
e. Behavioural issues

Conclude with success of Bank-SHG Linkage program

Farm Loan Waivers

Pillar 2A: Fiscal Policy Taxation
Fiscal Policy

Govt influences the savings, investment and consumption in an economy, to accomplish certain national
goals such as income redistribution, socio-economic welfare, economic development and inclusive growth

Challenges with Budget Making process

 Dynamic policy-making environment

 Budgetary gap
 More political, less economical
 Constrains by FRBM Act
 Insufficient data
 Weak scrutiny mechanisms
 Limited parliamentary control
 Transparency vs. secrecy: crony capitalism
PM-CARES vs PM-NRF

Budget
Direct Taxes
Direct Tax Task Force recommendations:

Indirect Taxes
GST

101st Amendment act 2016

Challenges

1. High rates and Multiple slabs 4slabs and many daily necessities in 18% slab
2. Frequent changes harming business criticised by 15th FC chairman
3. Fall in collection  COVID, Protectionism, automobiles, etc.
4. State compensation issues
5. Inconvenience to small traders  compliance burden and costs
6. Input tax credit not passed onto consumers inflation
7. Inverted duty structure

Inverted duty structure

E-Way Bill
GST Compensation to States
Parliament enacted GST Compensation to States Act 2017:

1. GSTC recommended Union govt to impose GST compensation cess on specified luxury and demerit
goods (pan masala, aerated water, tobacco, etc.)
2. For first five years since inception from 1st July 2017
3. Sec 7: 14% CGAR wrt 2015 VAT collections
4. Sec 8: Extending compensation cess beyond 5 years

Why?
Pillar 2B: Budget Taxation issues
Finance Commission (15th)
Article 280: President of India forms a Finance Commission (a quasi-judicial body) every 5 th Year or earlier,
with 1 chairman and 4 members. Eligible for re-appointment. Recommendations are not binding on the
government but usually not rejected.

15th FC  Under chairmanship of NK Singh

Terms of Reference
1. Vertical and horizontal devolution of Union Taxes (except surcharge, cess and IGST)
2. Grant in aid to the states
3. Augment consolidated funds of States to help local bodies
4. Matters refered by President
5. Use census-2011 for calculations
6. Measures for fiscal discipline
7. Financing disaster mgmt. initiatives
8. Performance based incentives to states
9. Non-lapsable funds for defence and internal security
Tax Devolution
Vertical : 41%

Horizontal:

Vs 14th FC:
Grants by 15th Commission

Permanent Status to FC
Recommendations by 15th FC
Special Category State
Black Money and Issues
Definitions

Ways to do it

1. Tax Evasion
2. Tax Avoidance
a. DTAA and Round tripping: Mauritius and Singapore
b. Non Resident Status: No need to pay tax on income from foreign countries
c. Place of Effective Management
d. Base Erosion and Profit Shifting
e. Transfer Pricing
f. Angel tax on startups

Consequences

1. Source of Money laundering terrorist activities

2. Loss of revenue to exchequer
3. Limits fiscal policy capacity for development and economic growth
4. Fiscal repression of households
5. Discourages honest tax payers
6. Artificial inflation in real estate, healthcare, etc.

Steps Taken

1. Tax Evasion checks

a. PMLA Act 22002
b. Undisclosed Foreign Income and Assets Act 2015
c. Benami Transactions Prohibition Act 2016
d. Schemes like Sabka Vishwas LDS Scheme, Vivad se Vishwas scheme for Direct taxes
2. Tax Avoidance checks
a. Revising treaties wrt DTAA
b. POEM norms
c. BEPS: India signed OECD multilateral convention
d. Transfer Pricing Authority for Advanced Rulings
e. Global Minimum Taxation by G7
 3. Reducing Tax terrorism
a. Updated return forms to correct errors
b. Document identification number
c. Time limit on opening closed cases
d. Taxpayers charter
4. Promoting tax collections easier process
a. Cash transaction limits
b. Pre filled online forms
c. Faceless interaction b/w tax payers and officials

Tax payer Charter

Global Minimum Taxation

Two pillar approach

Conclusion
Retrospective Taxation

Significance

1. Clarity to investors  EODB

2. Instill credibility to GoI  future partnerships
3. Increase investment into the economy
4. Addressing stressed sectors
5. Cost of arbitration at large scale
India’s Low Tax: GDP ratio

Why?

How to improve?

1. Behavioural economics by ES
a. Tax fairness: quality of services and horizontal similarity
b. Check wastage of tax payer money (corruption)
c. Display of ‘Your tax money at work’ at public construction sites
d. Billboards highlighting self employed employees paying good amount of tax
e. Stringent punishments for tax evasion
f. VIP treatment 10 10 top tax payers within disctrict
th
2. 15 FC recommnedations
a. Exapnd the scope of TDS/TCS
b. Address underreporting of incomes
c. Taxable income is very low Economic growth
d. Increase limit on Professional tax
e. Reduce reliance on indirect taxes
Pillar 2C: Budget Expenditure (Current)
Subsidies
Subsidy Reforms

1. Delivery Reforms by ES
a. Use jan dhan trinity  DBTs
b. DBT not sufficient alone  augment with BAPU
c. Explore Universal Basic Income
d. E-RUPI: coupon base subsidy model
2. Reduce Subsidy burden (Behavioural Economics)
a. Default ticked option
b. ITR forms have options of giving up LPG subsidy
c. Quick and hassle free process
d. Reinforcement by banners and scroll of honour
e. Display social message during movies
Pillar 2D Capital Budget
Foreign Borrowing in Foreign Currency
Disinvestment

In addition to this: National Monetisation Pipeline + National Land Monetisation Corporation

Economic Survey on Privatisation

1. Improves Profitability
a. Margaret Thatcher privatisation in UK led to increased profitability
b. Tech up grade
c. Efficient management
d. Help in economic growth and employment generation
2. Mode of Privatisation Singapore Model
a. Create a holding company and transfer shares to it
b. Professionalism and autonomy in disinvestment process
Deficits and Management
Definitions

Issues with Deficit

But no such issues in India (ES)

1. RIcardian Equivalence invalid

a. Citizens are not perfectly rational  emotional urges in shopping
b. All are paying taxes not ture
2. Crowding out of pvt borrowers
a. Investment in social infra and econ growth  incomes increase and thus savings
b. Demographic dividend of India
c. Banking habits improved more money in banks  larger money supply
d. Economic growth  larger saving
3. Sovereign Credit Rating
a. India’s macros are stable
b. Zero history of sovereign default
c. No strong correlation with SCR and Indian economic performance
4. Borrowing capacity
a. Economic growth leads to debt substainability  India has no issues
Steps Taken
FRBM Act 2003
Fiscal Responsibility Recommendations by 15th FC

Extra-Budgetary Resources
Fiscal Council in India

Functions

Why needed in India?

Conclusion
Public Expenditure Management Challenges
Conclusion
Budgeting Practices
OUTPUT OUTCOME FRAMEWORK FOR SCHEMES

Gender Budgeting
Rationalisation of CSS
Countercyclical Policy
Pillar 3A: Balance of Payments
Basics of BoP
Define

Key BoP issues

1. Imports
a. Large imports of Crude Oil
b. Import of Gold
c. Palm oil imports
2. Exports
a. Limited capacity of SEZ
b. Lagging manufacturing/assembling
c. Global protectionism and trade wars
d. International treaties and issues
3. Investments
a. FPI outflows
b. FDI limits
c. Limited currency convertability
Oil Issues of India: Large Imports
Measures: 1. HELP 2. Strategic Reserves 3. Purchase from Russia 4. Rupee designated purchases

HELP
Oil Price Volatility
Fall of Indian Rupee

Measures taken

1. Doubling ECB limits

2. Liberalised norms for foreign investments in govt securities
3. Removal of cap on interest rate that lenders can offer on NRI foreign deposits
4. Dollar swaps
5. Increasing repo rate check on FPI outflows due to Fed tapering
6. Rupee-Rouble agreement

SEZ Issues

Issues:

 Land related: Unutilized land and Misuse of benefits

 Multiple legislations
 Constrains in ensuring credit
 Legal hurdles: poor ADR
 Site selection for SEZs has been guided by self-serving agendas rather than development
 Site selection wrt real estate speculation
 Lack of support from state government
 Restrictions on domestic trade
 Unpredictable tax regime
Reducing Current Account Deficit
See as Reducing imports and increasing exports

Import Reduction

1. HELP reduce oil import by 10%

2. Gold Monetisation scheme
3. Purchasing oil at cheaper rates
4. Palm oil production increase
5. Atmanirbhar Bharat
6. Budget 2022
a. Increase custom duty on certain items like umbrella, ear phones, etc.
b. Reduce tax benefits to bizmen on imports of machinery buy from India
c. Ban on drones import
d. Defence Indigenisation
e. Excise duty on unblended fuel

Export Increase

1. Budget 2022 new sex law

 2. PIL scheme
3. Nirvic scheme
4. Trade agreement with USA and other FTAs
5. RoDTEP

Foreign trade Policy

Pillar 3B: International Trade Issues
Non-Tariff Barriers
RCEP
Protectionism/Trade War Impact on India
BREXIT
India UK Roadmap 2030
Osaka Declaration
Pillar 4A: Agriculture Sector

Conclusions

Agri Inputs
 Land Reforms

Various causes for incomplete land reforms and obstacles:

1. Unclear Legislation:  certain built-in faults. unsatisfactory definition of personal cultivation,
inadequate definition of etc.
2. Lack of Political Will: poor implementation
3. Bureaucratic Obstacles
4. Lack of coordination:  implemented at a slow pace and also in an uncoordinated manner
leading to a total delay in implementing the reforms.
5. Differences in the Laws related to Land Reforms: inter state variations
6. Litigation: largest number of litigations are property based
7. Incomplete Land Records
8. Non-Participation in Government Programmes
Way forward: General ones

Seeds

Measures taken

1. HYV under Green revolution

2. IFFCO Bazaar
3. R&D in seed tech
4. GM Crops
 5. Landraces
6. Seed Village Concept
7. Protection of Plant Varieties and Farmers' Rights Act

GM Crops
Water

Fertilisers

Urea Issue

Measures

1. Neem coated Urea

2. Soil Health Card
3. Nutrient based subsidy
4. DBT of fertiliser subsidy
5. Nano Urea
Pesticides and Weedicides

Paramparagat Krishi Vikas Yojana

Components

1. Participatory Guarantee System Certification  cluster approach

2. Adoption of organic village for manure management
3. Packaging and Branding in Cluster
4. Custom Hiring centres
5. Raising Organic nurseries
6. Training of farmers for Organic techniques
Limitations of Organic Farming

Farm Mechanisation
Credit and Insurance

Measures taken

Negotiable Warehouse Receipts

Agri Output
Crop Residue Issue

APMC
Agri Selling
Agro Export Policy 2018
MSP
From hand made notes

Buffer Stock Issue

Form Hand made notes

Income Support: PM KISAN

Food Inflation

Govt Initiatives to check Inflation

1. Minimum Export Price

2. Open Market Sales Scheme
3. Price Stabilisation Fund
4. Operation Greens for T-O-P
5. National Mission on Edible Oils-Oil Palm
6. Reforms in Essential Commodities Act
Food Processing Industry
At Export Stage:

Also, Matsya Sampada Yojana

Animal Husbandry
Cattle
Cover from hand made notes

Fisheries

Govt Initiatives

PM-Matsaya Sampada Yojana

Research and Development
Agri Extension Services
Pillar 4B1: Manufacturing Sector
LPG Reforms

Analysis of reforms

Positives

1. post–1991 India witnessed a rapid growth in GDP on a continual basis for two decades
2. While the industrial sector reported fluctuation, the growth of the service sector has gone up. This
indicates that GDP growth is mainly driven by growth in the service sector
3. The industrial sector witnessed a steep decline during 2012– 13, in the subsequent years it began
to show a continuous positive growth
4. The opening of the economy has led to a rapid increase in foreign direct investment and foreign
exchange reserves. increased from about US $100 million in 1990-91 to US $ 30 billion in 2017-18.
5. Rise in FOREX reserves. Over 600B$
6. Since 1991, India is seen as a successful exporter of auto parts, pharmaceutical goods engineering
goods, IT software and textiles.
7. Prices in check inflation in control

Negatives
 1. reform-led growth has not generated sufficient employment opportunities in the country
2. Reforms have not been able to benefit agriculture, where the growth rate has been decelerating.
3. decreasing demand of industrial products due to various reasons such as cheaper imports,
inadequate investment in infrastructure etc. Domestic manufacturers are facing competition from
imports.
4. India still does not have the access to developed countries’ markets because of high non-tariff
barriers.
5. Disinvestment: Undervaluation of assets  substantial loss to the government and the outright
sale of public assets
6. placed limits on the growth of public expenditure, especially in social sectors.
7. In order to attract foreign investment, tax incentives are provided to foreign investors which
further reduced the scope for raising tax revenues  low tax: GDP ratio

Industrial revolution 4.0

Govt Initiatives

Currently Commerce Ministry is formulating a new Industrial policy focusing on 4.0 revolution

Circular Economy

Benefits:
1. Industry
a. Need of raw material
b. higher utilisation of energy and resources
2. Environment
a. Reduce waste generated and hence problem of solid waste mgmt.
b. Reduced emissions: saves energy
3. Cost effective products for consumers
Models of Circular Economy

Case of India
1. 40 lakh cr+ by 2050
2. Reduced GHG emissions
3. Sustainable economic growth: linear to circular
4. More employment and per capita income
5. India has a huge potential for reuse and recycling (only10-1%currently)
6. Sectors like construction, agri and automobiles have great opportunities
Steps taken:
1. SBM: waste to energy
2. Digital India: component of recycling
3. scrapping policy
4. Waste mgmt rules
5. Right to Repair
Need of Labour shift from AgriManufacturing
Assemble in India
PLI Scheme

Startup issues: Regional Variations in new firm nos

India World’s Pharmacy

IPR Issues in India

Govt Initiatives

1. Atal Innovation Mission

2. Free training to entrepreneurs on how to file a patent
3. Hackathons
4. YUKTI
5. Uchattar Avishkar Yojana

Ease of Doing Business

Judicial Reforms

Promote arbitration, improve contract enforcement

Pro-Business vs. Pro Crony

Over Regulation in India

More rules More issues

Labour Reforms
Code on Wages 2019
Textile Industry
MSME Issues

UK Sinha report 2019 3. Easier NPA resolution

4. Pending payments
1. Easier registration 5. Training and social security
2. Easier loans
MSME Dwarfism
Pillar 4B2: Service Sector

Knowledge Economy

Consumer Protection Act 2019

Replaces older act of 1986

Features of the act

Institutional setup
1. Consumer Dispute Redressal Commission: DisctrictState National
2. Central Consumer Protection Authority
a. can intervene to protect consumers from unfair trade practices
b. can also launch class action against a company
c. order recall or refund of products
3. Consumer Protection councils  awareness gen

Functional Features
1. Product liability extended to damages caused
2. Unfair contracts liable to compensate consumer
3. Complaints can be filed electronically and virtual hearing
 4. E-Dakhil portal launched by NCDRC
5. Regulation on Celeb ads
6. Rules for e-Commerce websites

Pillar 4C: Economic Planning

Planning Commission Limitations

NITI vs PC

Important initiatives by NITI

1. Aspirational District Programme
2. Strategic Disinvestment
3. POSHAN Abhiyan: NITI VC is head of National Council
4. Help in framing bills and policies
5. SDG Indexes and other indices
6. Output Outcome framework for monitoring
7. Involvement of industry and academicians
8. Darpan portal
9. Atal Innovation Mission
10. National Program on AI
Unemployment

Decline in Female Labour force participation rate

Gig Economy
A gig economy is a free market system in which temporary positions are common and organizations
contract with independent workers for short-term engagements
56% of new employment in India is being generated by the gig economy companies across both the blue-
collar and white-collar workforce

Jobs for all:

1. Women along with household responsibilities
2. Students with part time availability
3. Agriculture sector: High amount of idle time. supplement incomes
4. With internet, employment for people in remote areas
5. Jobs range from very high skills to low skills ex: delivery personnel
6. New supply chains and services in Urban areas: creation of employment opportunities. ex: uber,
swiggy, online teaching, etc.

Relevance:
1. Reducing fixed costs for employers
2. Providing labour on demand
3. Supplementing incomes with limited time investment (women and student)
4. Formalising labour markets
5. Higher productivity with cutting idle time
6. Extension of opportunities to remote areas

Challenges:
1. largely unregulated, therefore workers have little job security and few benefits
2. an extension of India’s informal labour,
3. worker need to be skilled enough to have good bargaining power
4. will have to upgrade his skills on his own at his own cost.
5. demand-supply mismatch will only get worse over time, depressing wages.

Code on Social Security, 2020

1. Included Platform workers under the security provisions
2. Mandatory registration of gig and platform workers
 3. power upon the Central Government to frame welfare schemes for the workers in the unorganized
sector (funding will include funds from aggregators)
4. National Social Security Board
5. establish a Social Security Fund for gig economy workers

Way forward
1. implement tax rebates and concessions that can be passed on directly to drivers or delivery
partners as health or insurance benefits
2. only way to create employment for a large semi-skilled and unskilled workforce
3. policies and processes that give clarity to the way the sector should function
4. Training mechanisms to be developed for skilling up

Pillar 4D: GDP

5T $ Economy
Budget-2019: $5 Trillion economy

Economic Survey Recommendations

1. Lower Capital Output ratio

2. Focus on Investment over savings
 3. Supply side reforms to economy
a. Degregulation of multiple sectors
b. Reducing role of govt in commercial activities
c. Creating physical infra PM Gati Shakti
d. Creating Social Infra
4. Reduce Economic Policy Uncertainity
a. Predictable policies
b. Keep consistency and build trust with industry
c. Monitoring of policy implementation
d. Check overreach

Niti Aayog Recommendation

Economic Policy Uncertainty

Reduce Economic Policy Uncertainity

1. Predictable policies
2. Keep consistency and build trust with industry
3. Monitoring of policy implementation
4. Check overreach
Atmanirbhar Bharat: Features summary

Features

1. Money and Finance

a. RBI’s monetory policy and interventions
b. Govt loans to MSMEs, NBFCs
c. Relaxation with compliance
2. Financial Inclusion and Insurance
a. Insurance for corona workers
b. Rozgar Yojana
c. Direct money transfers
d. PM-Svanidhi for street vendors
3. Taxation
a. Help to states with finances
b. Relaxed deadlines
c. PM-CARES
d. Cap ex loans to states
4. Agri
a. PM Kisan instalment ahead of time
b. MSP increased
5. Manufacturing
a. PLI Scheme
b. Changed MSME defn
c. Mudra loans
6. Infra
a. Rental housing
b. PPP model expansion
c. Special transport for migrants
7. Poverty and Hunger
a. MGNREGA funding increased
b. One Nation One Ration Card
c. PM-Garib Anna Kalyan Yojana
8. Education
a. New portals and TV channel for education
Bangladesh per capita higher than India

Limitation of GDP as measure

Economic Growth vs Development
Pillar 5A: Infra 1
Mining Act Reform 2021

Energy
Coal
Coal Legislation Reform 2020

Coal Crisis in Oct 2021

India can’t switch from coal
Steps Taken

Electricity
Grid Related Projects

Green Energy Corridor Project

Integrated Power Dev Scheme
Renewable
COP 26 announcements

Water and Sanitation: SBM

Benefits of SBM

Way forward (by ES)

Pillar 5B: Transport Infra

W
ater Transport
Ports

Blue Economy
Road

Schemes

PM Gram Sadak Yojana

Bharatmala Prayojana

Reduce Fossil Fuel Usage and Emissions

E20 Blending of Fuel

National Hydrogen Mission

E-Vehicle
Challenges by ES

Steps taken by Indian Govt

Vehicle Scrappage Policy

Motor Vehicle Amendment Act 2019

Railways
Personnel Reforms: IRMS
Private Trains

Airways
Drones
Urbanisation

AMRUT Mission
Smart Cities Mission
Impact of Climate Change on coastal cities
Recent Mumbai and Chennai floods
Impact:

1. Sea level rise and flooding

2. Danger to coastal ecosystems and wetlands
3. Increase in frequency of extreme weather events
4. Biological hazards: diseases
5. Loss of infra and life
6. Relocation: from Jakarta to Borneo
7. Food insecurity: fisheries and plants species

Steps Taken:

1. State and city level climate action plan. eg: bombay

2. CRZ Regulations
3. Use of GIS data to study flooding in Chennai, Kolkata and Mumbai
4. Sea water resistant agri varieties introduced in Bengal
5. Construction of sea walls

Way forward:

1. Building capacity
2. Funding
3. Risk assessment
Housing

Affordable Rental Housing Complexes

Rural Infra

Model Panchayat Citizen Charter Framework

Infra in Backward and Border areas
Ordinance Factory Reforms
Pillar 5C: Infra Digital, Models and
Finance
Communication

TelecomAGR Issue
Digital India Programme  List of initiatives

5G Revolution
Initiatives
1. 5G Hackathon by DoT
2. 5G trails started

Public Data
Space Tech Infra
Investment Models

PPP Model
GoCo Model
Hybrid Annuity Model

Viability Gap Funding

Infra Financing

National Infra Pipeline

National Monetisation Pipeline

PM Gati Shakti
Intro

Coverage: Economic Zones like textile clusters, pharmaceutical clusters, defence corridors,
electronic parks, industrial corridors, Agri zones will be covered to improve connectivity &
make Indian businesses more competitive.
It will also leverage technology extensively, including spatial planning tools with ISRO’s
satellite imagery. This will be used for real-time monitoring of projects.

What services will be provided by the PM Gati Shakti?

1. Planning and obtaining clearances: The portal will offer 200 layers of geospatial
data, including on existing infrastructure as well as geographic information about
forests, rivers and district boundaries to aid in planning and obtaining clearances.
2. Centralised tracking of projects: track, in real-time and at one centralised place, the
progress of various projects
3. Prioritize projects:  different departments will be able to prioritise their projects
through cross-sectoral interactions”.
4. Project clearances: highlight all the clearances that any new project would need, based
on its location — and allow stakeholders to apply for these clearances from the relevant
authority directly on the portal
5. streamline the process and shorten the period required for clearances

How PM Gati Shakti will help India’s development?

 1. Bring the economy out of pandemic impacts: The infrastructure projects will boost
jobs and increase the demand for goods and commodities, besides attracting major
investments.
2. Solve issues in logistics: logistical cost in India is about 13%-14% of GDP as against
about 7-8% of GDP in developed economies.
3. increasing cargo handling capacity and reducing the turnaround time at ports to boost
trade.
4. Help in increasing economic zones and industrial parks: not able to reach their full
productive potential due to inefficient and fragmented multi-modal connectivity.
5. boost the last-mile connectivity.
6. Reduce implementation overlaps: For example, newly-built roads are being dug up by
the water department to lay pipes and construction of different tunnels for roads and
railways in the same area.
7. Save taxpayers money: There is a wide gap between macro planning and micro
implementation, problems of lack of coordination in infra projects and lack of advanced
information. This hampers the construction and wastage of the budget.
8. Help in reducing human intervention within ministry

What are the challenges associated with the functioning of PM Gati Shakti ?

1. Investments from states: The Economic Survey for 2020-21 underscored the role of
active Centre-State partnerships for infrastructure building. ₹8.5-lakh crore to be
invested by either side annually.
2. With the pandemic and its associated challenges, the state governments don’t have
enough finances to invest such large amounts.
3. Low Credit Off-take: reduce private investment in infrastructure projects. NPA crisis in
future
4. The plan does not address a few key infrastructural challenges: Land acquisition 
5. There are other issues such as litigation issues, alienation of local communities and
the violation of environmental norms, etc.